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But there are other catalysts to consider.
Project Canoe is and has been proof for some time that cable providers are serious about, at the very least, the concept of and promise of targeted, personalized advertising. Recently, this ambition has borne fruit, as it was announced at the end of June that Canoe had rolled out clickable interactive advertising backed by paying advertisers that are hitting several million TV screens. While Canoe was hardly forthcoming with additional details, this could potentially demonstrate the opening of a widespread, interactive, two-way advertising experience hitting the TV sets of millions of subscribers.
While not specifically targeted, this interactive component is another aspect of what could make service provider advertising a special experience, unlike scattershot messaging coming from other sources. CSPs possess the level of access and the wherewithal to see that the ads get to the right consumer, and that the specific consumer can immediately interact and personalize the ads.
Which is something I’ve noticed web-based video providers like Hulu already doing.
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There is a limit to the degree of personalization subscribers generally appreciate. |
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And that is all done without the level of access to my information that service providers possess. Time Warner Cable is party to enough information about my usage habits to provide me with one heck of a customized, personalized ad experience.
But there is a limit to the degree of personalization subscribers generally appreciate. We’re all familiar with the complaints about Facebook’s “instant personalization”, and concerns about the privacy violations that may or may not result from Facebook’s policies on user data.
If, then, a social networking site created for and largely populated by users from a generation accustomed to and, to an extent, desensitized to phenomena like data-mining and privacy concerns (after all, the entire point of the site, for many, is to share intimate life details with strangers or near-strangers…) is still under scrutiny over possible privacy violations, it’s enough to give CSPs whose customers are less accustomed to such openness some serious pause.
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If I’ve decided to catch up on Last Comic Standing or Burn Notice (and yes, that Michael Weston does seem to be phoning it in a little this season, but I digress) on a lazy Saturday morning, Hulu often gives me a choice of two or three different ad experiences. I’m going to hear about the Buick LaCrosse whether I want to or not, but I must admit that it’s at least slightly nice to be able to choose whether I hear about the vehicle’s fuel efficiency or its luxury finishes.
In addition, every ad is tagged with a clickable “Is this ad relevant to you” message which, ostensibly, provides information that can be used to customize my advertising experience later on. Granted, I tend to have a pretty high threshold for relevance before I ever click “yes”, but when I do, I’m sure it gives Hulu plenty to go on.
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However, if CSPs can find the balance between personalization and privacy, and can figure out ways to create incentives for consumers to pay any attention to the advertising to which they are exposed, there is a wealth of money to be made.
Comcast’s recent numbers celebrated an uptick in local ad revenue, and the company rejoiced. Ad sales had dipped under the weight of a sagging economy, but rebounded by 24% in Q1 of 2010. Great news!
However, digging a little deeper, it looks like the raw number for ad revenue is around $360 million. While no small amount, the aforementioned figures for addressable ad potential mean that these numbers could not only grow, but could explode under the proper circumstances.
Service providers: How will you respond?
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